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Interim Results for the six months ended 31 December 2008

Aspen Pharmacare Holdings Limited. Interim Results for the six months ended 31 December 2008. Take a pill…. Income statement re-analysed. Segmental revenue. Segmental EBITA. Analysis of revenue. Average movement currency against USD for the six months ended 31 December 2008.

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Interim Results for the six months ended 31 December 2008

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  1. Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  2. Take a pill… Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  3. Income statement re-analysed Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  4. Segmental revenue Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  5. Segmental EBITA Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  6. Analysis of revenue Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  7. Average movement currency against USD for the six months ended 31 December 2008 Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  8. EBITA margin comparison Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  9. Funding costs Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  10. Abridged balance sheet Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  11. Funding raised by Aspen Global • Value • USD 385 million • USD 346 million for acquisition of Eltroxin, Imuran, Lanoxin and Zyloric from GSK • Balance of facility for further investments • Repayment terms • Effective 10 October 2008 • 5-year amortising loan of USD 255 million with 1-year capital repayment holiday • 5-year non-amortising loan of USD 130 million to be paid out of free cash flows • Interest hedge arrangement • Fixed cost of 6.11% for 90% of the term • Year 1 to 3: 100% cover • Year 4: 83% cover • Year 5: 66% cover • Uncovered interest payments charged at 3-month USD LIBOR + 2.8% Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  12. Key ratios Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  13. Distribution of fund managers Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  14. South AfricaPrivate sector (per IMS December 2008) Key Growth Drivers  Pricing  Generic shift and acceptance  Emerging middle class driving volume growth  GEMS  Patent expirations  New trend to self medicate Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  15. South Africa Total private market Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  16. South Africa Ethical / generic percentage splitMAT Rand market share (Sch 3-7) (per IMS December 2008) Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  17. South AfricaEthical / generic percentage splitMAT Units market share (Sch 3-7) (per IMS December 2008) Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  18. South AfricaTotal pharma marketMAT Rand shares (per IMS December 2008) Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  19. South AfricaAspen Pharmacare total vs. total industryMAT Units and Rand market growth (per IMS December 2008) Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  20. Aspen in South Africa • Aspen is the largest pharma company in South Africa: • Leadership position in both the public and private sectors • Extended our market share in the private market: • Market share at its highest point • Focus on manufacturing excellence: • Professionalism, credibility, affordability, quality and service: • Key factors influencing providers • Facilitates a generic shift • Secure platform for international expansion • Reinforces confidence in the Aspen brand • Public sector continue to show volume growth: • Volumes significantly higher than forecast by the State: • Caused by the suspension of many previously approved facilities • Unplanned, erratic demands places severe pressure on operations • Increased uptakes of ARVs • Absolute number of patients increasing Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  21. Aspen in South Africa (cont.) • Margin contraction: • Depreciating rand • Shift in mix to higher value / lower margin ARVs in public sector • Price increases in both the public and private sector to provide relief • Aspen has outperformed the market in total: • Aspen has achieved this in each individual market segment • Expect more of the same in the second half South Africa continues to perform. Exceeded our own expectations of market penetration! Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  22. South Africa Private generic marketMAT Rand shares (per IMS December 2008) Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  23. South AfricaAspen generic vs. generic industryMAT Units and Rand market growth (per IMS December 2008) Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  24. Aspen in South AfricaPrivate generic industry • Aspen has extended its leadership position • The ownership of competitors has changed: • Aside from Adcock Ingram, competitors are international: • Small local operators purchased or closed • Reflection of the increased capex required • Competitive pressures in the market • Demand to remain buoyant: • Given patent expirations will continue to 2011 • Definitely emerging middle class factor: • Absolute numbers increasing • Aspen has a large share of private ARV market • Government initiatives driving volume growth • Reviewed volume trends of individual product sold in 2003 vs. 2008: • Trend of increased volumes on existing / base generics • Price increases to be implemented in February / March 2009: • Regulation 9 (special price increases) also applied for: • Margin improvements and supply security Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  25. Aspen in South AfricaPrivate generic industry (cont.) • We are working through the process with the regulators: • Commitment from both sides • Still many wrinkles, but Regulator now more pro-active and engaging • Aspen has a better understanding of process Never been an advocate of price controls, however, if applied consistently, system can work. Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  26. South Africa Antiretrovirals - private sector market share per company MAT Rand Value (per IMS December 2008) Percentage Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  27. South AfricaAspen Pharmacare OTC vs. OTC industryMAT Units and Rand market growth (per IMS December 2008) Percentage Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  28. South AfricaOTC business • Increased market share • Significant volume increases: • New trend • Historic sector volume growth had been pedestrian • Profitability pressure in OTC: • Rand effect / components etc. • Detrimental loss of high margin slimming business: • Battling to regain lost sales with new product formulations • Volume increases have not offset these losses OTC Volumes growths great, but profitability still recovering from the slimming products body blow. Should continue to benefit in tough economic times as people tend to self-medicate. Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  29. South AfricaConsumer business • Unaffected by pricing legislation • Infant Milk Formulas: • Core brands within consumer • Continue to over-perform • Aspen’s quality standards ensued that our brands were unscathed by the milk scares • Driven both volume and value growth in consumer sector • Other core brands include inter alia: • Lennon Dutch medicines, Guronsan C, Safyr Bleu & Woodwards: • Showing double digit value/volume growth • Laxatives only under performers, post phenolphthalein Our “pharma-based” consumer products appear immune to economic climate. Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  30. South AfricaPublic sector • Aspen supplies billions of tablets to government • Large fluctuations in this demand places operational stress on the business: • Joint tenders have become exclusive: • Experienced two year projected off takes within two months • When tendering next year need to take cognizance of the above • Public sector business is key in driving: • Economies of scale through the facilities • Volumes give procurement leverage • Security of supply for South Africa through domestic procurement • Has a pricing mechanism which takes cognisanceof shifting exchange rates • Profitability • We measure the number of patients on ARVs by our Lamivudine off take: • Molecule is used in almost all combinations Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  31. South AfricaPublic sector - Antiretrovirals Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  32. Analysis of South African business Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  33. South AfricaSummary and prospects • Aspen enjoys growing market shares in all sectors: • Both public and private sector showing volume growths • Price increases will provide relief: • Positive effects from both public and private to flow next half • Generic sector is buoyant: • Competition intense • Regulator is approachable: • Trying to find solutions together • Pricing methodologies more predictable • Aspen has a better understanding of what is required • Government initiatives could result in even further increases in private market patients • Sector is resilient and growing: • Generics in particular have and will continue to grow faster than the market Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  34. South AfricaSummary and prospects (cont.) • Aspen is the spine of the South African pharmaceutical industry • We will continue to perform in this dynamic market • Increased emphasis on our profitability: • Benefits should flow through in this half • Traditionally our second half has: • More turnover and better profitability returns • Project the trend to continue • Anticipate higher profit growth rates over last year in H2 than those achieved in H1 Aspen, well positioned to continue to build on the momentum created over the last decade. Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  35. South AfricaOperations • Without our operations, our international aspirations would have stayed a dream • Embarked on an ambitious programme of technology and process improvements five years ago: • Decrease process times • Improve GMP • Improve yields • Increase compliance • Decrease manual intervention • PIC compliance • Time consuming and intensive, but starting to reap the rewards • Positioned to: • Export • Benefit from our economies of scale • Export Aspen IP to other markets: • Export revenues already material Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  36. South AfricaOperations (cont.) • Transfer of products from the heritage facility to OSD 2 start from June Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  37. South AfricaOperations – OSD recovery history • Continue to build on our skill base: • Showing tangible improvements • Output doubling year on year Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  38. South AfricaSterile facility • Undergoing start up: • Media fills completed • Commence manufacture in April • Sales to start in June: • Prestige • Will be in excess of 1,5 million units per month Steriles Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  39. International operations • Now a larger contributor to operating income than South Africa: • Addition of exports would further skew the picture • Realisation of strategic plan which began with the manufacturing and IP upgrades • Distribution is divided into following key geographic regions: • Asia Pacific Australia / New Zealand / Asia / Japan • Latam Brazil / Spanish speaking Latam • Sub-Saharan Africa excludes South Africa • EMENA Europe / Middle East / North Africa • The GSK / Iroko product acquisitions will be overlaid on the above distribution infrastructures: • EMENA – turnover predominantly from these products • Other regions – bolt on to existing business / infrastructure • Profitability is not the risk: • Focus is on implementation • Structures to drive future growth Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  40. International operations (cont.)Global products from GSK / Iroko - focus on implementation • Complex process: • Requires meticulous planning • Key focus areas: • Transfer of regulatory applications • Change of packaging in all territories • Establish distribution platforms • Transfer of manufacture • Negotiation of API and other key cost inputs • Global IT interfaces: • Needed for the co-ordination of both procurement and distribution of finished goods and components • Establishment of sales and marketing infrastructure to drive sustainable growth • Implementation in hand: • No quick wins, grinding process, teams diligently working through checklists Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  41. International operations (cont.)Expected financial outcomes • Key outcomes vs our earlier expectations: • Sales  higher than budget  little denominated in dollars • Cost of sales  anticipate savings in actives / conversion • Marketing & Sales / Distribution  will be higher than current GSK charged costs  strategy to invest and grow sales • Operating Income  higher than we anticipated A secure income stream which can be launched into additional geographies and sustained through representation and will be further complimented by Aspen’s product stream. Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  42. International operations (cont.) LATAM • Split into two regions: • Brazil • Spanish Latam • Given the larger base business and infrastructure acquired in Brazil, this has been our initial focus area Only Spanish Latam sales Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  43. International operations (cont.) BRAZIL Key areas: • Understanding and consolidating the business acquired: • Focused primarily on hospital tenders • Completion of Campos facility: • Needed given domestic preferences • All local approvals by March 2009 • International approvals to follow • Driving future private market strategy: • Employed and trained 158 representatives • Acquired branded products • Employing the future management structure: • Key posts in sales, operations and finance now filled Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  44. International operations (cont.)Campos Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  45. The Brazil team Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  46. International operations (cont.) • New management appointed to hospitals: • Grown turnovers and profitabilities • Challenged by shifting currencies: • R$ / $ = 1.57 → 2.50 • New focus on private business • Pipeline: • Strong organic pipeline: • Initially Strides based • Now supplemented by Aspen • Key registrations expected in 2009 • Registration timelines approximately two years Brazil is being shaped and remains a priority territory for Aspen. Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  47. Aspen Australia

  48. International operations (cont.) ASIA PACIFIC • Established platform in Australia for the region: • Strong management • Created capacity in this structure to drive regional growth • Shown 55% growth in sales: • New Zealand turnover now more than NZ$10 million • Achieved in spite of heavy legislative pressure • Reimbursed price reductions of up to 25% • Growth achieved through product in-licensing and acquisition deals • Sustainable growth given strong organic pipeline • Margins impacted by depreciating currency • Supported by Australia’s best field force Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  49. International operations (cont.)Aspen rep performance overall up to Q4 2008 8.80 ASPEN performance Industry performance 8.60 8.60 8.40 8.20 8.03 8.00 Average score 7.80 7.60 7.40 7.20 7.00 CSL GSK BMS MSD Inova Pfizer Bayer Arrow Aspen Solvay Wyeth Eli Lilly Abbott Servier Innovex Novartis Organon Nycomed Lundbeck AstraZeneca Alphapharm Janssen-Cilag Novo Nordisk Sanofi-Aventis Munoipharma Schering-Plough Boehringer Ing. Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

  50. International operations (cont.) • Distribution networks throughout Asia being established: • Products acquired sold through networks by June 2009 • Actively seeking to increase product offerings through organic pipeline introduction • Complex regulatory channels easier to navigate given progress on regional regulatory harmonisation • Key regions initially identified include Japan, Thailand, Taiwan, Philippines • The broader region will provide even greater growth opportunities Aspen Pharmacare Holdings Limited Interim Results for the six months ended 31 December 2008

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